The Geo Stack

If you haven't already taken a look, Chris Dixon wrote a great post discussing the "geo stack." In particular, I found interesting his thoughts on the monetization layer. He writes:

Finally, monetization could be a very valuable layer. There are (at least) two parts to monetizing location. Getting local businesses to embrace the internet has been very slow going. Companies that make money on local businesses today (Yelp, Yext, ReachLocal) use expensive outbound calling and other "push" techniques to sign up local businesses. There remains a huge opportunity to supplant the yellow pages as the default advertising platform in local business owners' minds. If apps like Foursquare can build up enough marketing / PR momentum that every restaurant, dry cleaner etc feels like they need to "get on Foursquare" this could finally open the floodgates for local business advertising. The second part of monetizing location is facilitating and tracking offline purchases. 90%+ of purchases are still offline, although for many of those transactions people do research and make their decisions online. The internet doesn't get paid for these transactions. Companies like Milo (disclosure: I'm an investor) are doing interesting things in this space and I expect we'll see a lot more activity on this layer soon.

Below is my response as I wrote on his blog:

Interesting commentary. However, I'm not sure that recs delivered to your phone would appeal to a wide population. There is a huge difference between recs or "tips" delivered to you at home on your laptop vs. outside on your phone. On a laptop, the user is probably seated, has time, and is committed to making a decision. Often this is a purchasing decision, and they are actively searching for the rec (like when they go to Hunch.com). When delivered to a phone, the tip is delivered involuntarily (like on 4square), and the person is often in a rush, already has a plan for the next few hours at least, and not making a decision related to the tip. They could be at Starbucks and get the tip "Eric. S thinks you'd like XYZ restaurant or XYZ store." However, its early in the morning, and the user isn't making a decision related to eating or buying. People are less likely to remember a tip when they are not making a decision related to it. So, the tips aren't useful, but rather annoying. I'd bet that a small portion of the population would read these tips, and an even smaller portion would act upon them. If tips are less about where else to go, and more about what types of product to buy once you are at the store, maybe it is more relevant. I could see a wider audience finding location-specific tips useful, such as "you are at XYZ restaurant. People like you loved the steak," but is the there really a big difference (to Normals, not early adopters) between looking at this tip and simply asking the waiter what is good? I think the real usefulness to Normals is real-time rewards, delivered to your phone (similar to what Fred Wilson wrote about a few weeks back). Everyone likes to save money, and the rewards would be directly related to the purchasing decision at that moment ("hey, this is your 10th stop at Starbucks, you get a free coffee").